AHDB highlights relationship between cattle prices and meat yield

Aaron McDonald
· 02 August, 2016

A new report has shown that the prices paid for prime cattle don’t consistently reflect the yield of trimmed primal cuts from the carcase.

The report has been produced by the Agriculture & Horticulture Development Board’s (AHDB) Beef & Lamb division and concludes a series aiming to improve the transparency and understanding of prime cattle pricing. The research investigates how the price paid for cattle of different classifications relates with meat yield from the carcase.

According to the report, carcases that are distant from the target specification attract much lower prices than might be expected regarding their meat yield. The differences saw a significant increase over the year to February 2016.

It was shown that yields gradually declined as fat class rose and/or conformation fell – even if yields were adjusted to take account of the different value of cuts.

If prices (on a p/kg basis) were based only on primal yield, then they should follow the same pattern – with the highest prices paid for E1 animals experiencing a gradual decline as fat class rises and/or conformation falls.

Despite this, the research suggested that prices peak around classes 3 and 4L. Carcases with the best conformation tended to attract the highest prices, although there was less difference between grades than yields would imply.

“While some may conclude from this research that the prices paid for prime cattle are unfair, it’s important to bear in mind that processors need to ensure a supply of cattle that fit the requirements of their customers,” he said.

“There is a growing desire for consistency of cut sizes and appearance from both retail customers and consumers, with budget-conscious shoppers increasingly resistant to buying larger cuts and most retail packs restricted to cuts of a limited weight range. Saleability may therefore be affected by carcases which are either too large, too lean or too small.”

Howarth said that achieving this would require cattle that consistently met target specification, which would also help to minimise processing costs.

“Ultimately, decisions about pricing are a matter for commercial negotiation between producers and processors. However, the pricing changes over the last year should send a clear message to producers about the importance of ensuring their cattle meet the requirements of the market in order to receive the best prices.”